A formal announcement of the deal could come around Dec. 18, the birthday of
Kingfisher's flamboyant chairman, Vijay Mallya, the newspaper said, without
saying how it got the information.

Kingfisher, whose planes have been grounded for the past two months,
declined to comment on the report. Etihad did not immediately respond to an
email sent by Reuters.

Abu Dhabi-based Etihad will initially buy a 30 percent holding in December
and a further 18 percent by next August, the paper said, adding Etihad and
Kingfisher refused to deny or confirm the stake sale.

Battling stiff competition and high operating costs, Indian carriers have
been in talks to sell minority stakes to foreign investors. Etihad was reported
to be eyeing buying a stake in Jet Airways, India's largest airline by
total passengers carried.

Kingfisher, which Mallya launched with much fanfare in 2005, was once
India's second-largest airline by domestic market share. For most of this year,
the carrier has struggled to pay its staff and has not flown since early October
due to protests and safety concerns.

According to one estimate, it is saddled with roughly $2.5 billion in debt.

Kingfisher shares were up 4.7 percent in early trade on Tuesday.
($1 = 54.5150 Indian rupees)
(Writing by Ranjit Gangadharan; Additional reporting by Anurag Kotoky in New
Delhi)